undervalued? >> yes. but i also think there is events that can knock them off. but certainly there could be a substantial rally. >> jim, we'll have you back tomorrow. >> sounds like kenny. >> fantastic. sue, that will do it for this edition of "power lunch." thanks for watching, everybody. >> i'll see you back at the ranch, ty. "street signs" begins right now. have a great afternoon, everybody. ♪ this is ground control to major tom ♪ ♪ you've really made the grade ♪ >> to a "right stuff" "street signs" where risk taking is back on. from higher stocks to house flipping, to jumping out of balloons 24 miles up, even betting big on horses, americans are taking the plunge again. we have got a full hour of ideas for you and welcome in the ultimate risk taker himself, general chuck yeager is here. plus, sprint is turning japanese. we really think so. is this the beginning of a new buying spree a la the 1980s?

we'll dig into whether microsoft's big new music push is about five years too late. indeed. hello, everybody. it is a new week and whole new attitude for wall street. as for the nasdaq on pace to break a six-session losing streak. that is its longest since last november. it is the one story that everybody everywhere is talking about today. fearless felix free-fall from the edge of space. felix baumgartner parachuted nearly 24 miles to earth. that's about 128,000 feet. he became the first human to travel faster than the speed of sound without being inside an aircraft. he reached a top speed of mach 1.25, or just under 834 miles an hour. unreal. he landed in just ten minutes. >> i know the whole world is

watching now and i wish the world could see what i see. and sometimes you have to go up really high to understand how small you are. >> but there was another amazing feat over the weekend that you may not have heard about. 65 years after becoming the first human to fly faster than the speed of sound, retired air force big deer general chuck yeager did it again, believe it or not. we will speak to him today at 2:45 eastern time as where american stands in aerospace innovati innovation. da today's super strong retail sales show americans are shopping again despite all those doom and gloom headlines everywhere you turn. so let's bring in chief economist at wells fargo securities and ceo of air power system, which is a small business in tulsa, oklahoma. larry, why do you say that now is an exciting time? >> well, it is an exciting time,

especially in manufacturing, especially in oklahoma. the biggest problem we have are finding people that want to work. >> you find that a surprise to find people who want to work. when you look at unemployment numbers, does it scratch your head? >> i sure do. seems like the people that come in off the street looking for jobs, you hire the best that come through and then they don't show up on monday. it really does make you scratch your head. especially when we have some of the finest oklahoma educational institutions in the world. we could be retraining. we could help the people that are unemployed right now get ready to help us create jobs in oklahoma and we need them very badly. >> let's focus more on the positive. which is this. stocks are up. even house flipping is back. whether or not that's a good thing or not, you can determine. people though are taking more risks. is that a sign that confidence is strong?

>> confidence is improving. there's no doubt about it. >> strong or improving? big difference, right. >> improving. put it that way. i think the improvement is mostly looking at financial asse assets, high-yield bond spreads, high-grade corporate bond spreads have really narrowed. they believe in the equity market. not so sure about their own personal situation here in terms of the economy and job growth. as was suggested earlier. >> when we look at personal spending numbers out today, retail numbers, it was better across the board. i'm just wondering whether we're going to be able to revise up our estimates for third quarter gdp. >> i think a lot of people will look at 1.5% to 2% gdp. what's really happened we sort of wiped out all those recession forecasts. there is an also interaction going on here. you mentioned retail sales. you have stronger auto sales but a lot of those auto sales reflect asset-backed security purchases that someone is buying. there is an interaction here.

people feel like they're comfortable buying cars, but investors are finding it comfortable to buy asset backed securities to back up those purchases. >> it sounds like you want to grow though. right? sounds like if you want to hire new people, it means you would like to expand which means you are taking a risk. are you feeling more confident? >> oh, yes, definitely. i'm not going to jump out of an airplane but we did buy another company last year. our sales have been increasing at about 40% per year. things have gotten soft right now and i'm concerned it is because of the election coming up. but even with the election with about a 20% oing to end increase. >> why do you think the election would feed into softness in demand? what do you think it is? if people are uncertain about the outcome so therefore they're holding back on making big decisions? >> i think it is uncertainty. government has for years talked about us as business people being the bad guy, that created a regulatory environment that makes it really hard to grow and

to be successful. especially for our small community banks. >> john, what can we do to keep the positive momentum going? try to leave politics out of it a bit. what else can we do or is there nothing we can do other than rely on the collective confidence of american consumers to continue to increase? >> for you folks, it is just providing perspective that jobs are growing, the economy continues to improve, retail sales are up. that gives someone the perspective that overall we have a framework that allows us to be more confident -- >> when you say "you folks," you mean the media. i'm always glass half full. she's always downer, glass half empty. debbie downer. i'm talking about the good stuff. >> you're a downer and you're from australia? >> i'm actually not a downer at all. >> i think it is framing the economy to say look at the good news coming out there. >> how much do you think is going to be unlocked in the economy once the elections are over? i mean even just from a psychological perspective, one

step out of the way, uncertainty, out of the way. >> i think the election being done and the perspective that we are going to deal with the fiscal cliff, adds .5% to 1% of gdp growth. you'll see that jump as much as that. yes. confidence matters. >> larry, last question to you, as a businessman, what is one thing the government can do to make your life better to hire more workers to grow. one thing. you're an autocrat right now. >> wow. i'd like to do that. i think the one thing, we'd make people stay in school longer, in high school. don't let them drop out when they're 14, 15 years old. people -- everybody has a purpose and has a skill. if we could just keep people being trained to where when they actually have a skill, they can offer society. i'm concerned that in our prisons, 75% of our inmates don't have a high school education. you can't compete in life

without an education. i believe very strongly that most of the problems that we have in america, education is the answer. >> can't agree more. fix the education system, you fix a lot of other things. john, larry, thank you very much for your perspective. let's look at what's going on in the markets. high for the dow today was right around 100 points and we are he nearly there again. >> weyerhaeuser getting some love today. rbc capital upgrading the tok to outperform from sector perform, upgrading its price target to $30 a share. analysts writing it is getting more bullish on log and lumber pricing as the housing sector improves. that stock up better than 3%. >> seema, thank you. house flippers are making a big comeback, america. is that good news? or yet another example of how we're cursed to make the same mistakes over and over again. plus, is one of the presidential candidates better for the value of your home?

we're going to have those numbers for you next.

america is flipping out again. the number of house flips jumped 5% during the first half of the year. sure sounds like trouble, so diana, what is different this time? >> well, a lot, mandy. the flippers are back but they are a new breed. why? because prices are not rising today the way they were seven years ago. flippers must add value to the home to make profit.

secondly, many flippers today are selling to other investors who want turn-key rentals. take a look. close to 100,000 properties were flipped in the first six months of this year, that according to realty track, which defines flipping as a home bought an sold within six months. as you said, that's a 25% jump from a year ago. average flip time -- just 106 days. flippers are grossing an average $29,000 per property. but remember, that's before rehab and carrying costs which is very important. where's the action? yuma, arizona takes the lead in flips. but san francisco and miami are back, and atlanta where dispressed supply is huge. phoenix though flipping is down because investors have picked it clean and flipping down in new jersey because prices are still falling dramatically due to huge foreclosure backlogs. 63% of homes flipped are between 1,000 and 2,000 square feet. 14% are smaller than that. big homes are just not flipping

so well. realtytrack's darren bloomquest says today's flippers are selling to cash investors. >> you really can't help thinking that the fed really is probably thinking we didn't intend for this to happen, right? in terms of trying to get the housing market back on its feet. it probably didn't think that would be one of the things that came out of it. >> but a lot of these investors are using all cash. big cash hedge fund investors. not so much being driven by the mortgage race, not as much as you would think. this election is more than just about taxes economically. it is about housing policy as well. the election matters to the value of your home, especially in a few key states. chief economist at trulia joins us now. when i heard home flipping is

back, i groaned, i was nefbous. should we be scared of this? >> a lot of why we're seeing the home flippin that ere are fewer people who can buy a home for themselves to live in. credit's still tight. most people have not saved enough for the down payment so we have to see that demand come from somewhere. >> it's not automatically negative. >> that's right. >> in terms of the political impact of the housing market, is there a candidate which is going to be better for housing recovery? >> so right now the two candidates actually don't really have housing as a winning issue for either one of them. obama has tried some housing policies during the administration but the refinancing and loan modifications that we have seen have fallen short of even the administration's own expectations. romney's had some ideas but the boldest ideas haven't come through yet. >> in tipping voters, the misery

states in terms of housing, and also in the swing states, what does either candidate need to say to sway a voter to vote for them? >> two of the most important swing states right now are florida an nevada. those two states have what we call the highest housing misery in the country. sharp declines and a lot of borrowers now delinquent, behind in payments or in foreclosure. that means housing is weighing on people's minds in those states. those are the places where obama and romney need to share what their plans are for housing and how they're going to prevent the next housing bubble from happening. >> i got to imagine obama's going to do pretty well in those situations because he has talked about prans pal reduction which is what people want to hear. i want to owe less. >> these are swing states right now. they could go either way. the administration's gotten less what they wanted on principal reduction because the regulators have been reluctant to allow those agencies -- >> putting the nips on the president's plans. are you surprised either candidate hasn't talked about housing more?

>> it is somewhat surprising. but the housing crisis now is not as severe as it was a few years ago. the urgency really for the most part has passed. prices are now rising. we're seeing even foreclosures starting to decline in some states. >> is that why perhaps the focus in terms of the commentary about housing is more about preventing the next housing crisis as opposed to fix being the current one which is already off its low base? >> one of the things the candidates agreed on in the first presidential debate is that the housing market has actually begun to rise. the other other thing was about that mortgage regulations that are about preventing the next housing crisis, not fixing the last one. >> jed, i have a feeling we'll see you again soon. thanks. the story behind today's disaster dujour. here's one guess -- this did not end well. and if we couldn't be more psyched to talk to this man, i don't know what's happening. the legendary chuck yeager made history again yesterday.

here's the hollywood version of yeager in the movie "the right stuff." >> sir? over there. when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level.

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welcome back to "street signs." i'm seema mody keeping a close eye on financials. shares of goldman sachs leading higher on the back of strong earnings results from jpmorgan and citigroup. goldman sachs is scheduled to report earnings tomorrow before the bell. the stock up almost 3%. some big news. >> thank you very much. check out today's disaster dujour. it is not a stock, it is a fireworks display in eastern china that did not end well. 30 minutes into the show the fireworks started landing in the crowd. about 100 people were hurt. hard to see if you can tell what's going on. the only reason we are showing you this video, nobody was killed, no serious injuries. some fireworks exploding into a mass of people. today's sunshine stock is intersil. pointing to a stabilizing pc business adding 2012 may be

another down year but they still feel the stock is undervalued. we have a gain of about 3% today. listen, folks, i know we haven't seen a huge gain, we haven't had a 300-point rally that the media digs in to or 300 point collapses that we all run off screaming at. but slowly but surely we continue to go up. one of our producer brought up something cool today. we're 740 points away from our all-time on the high. that's about a google. >> we're a google away. >> we continue to climb. inside of the dow today, folks, bank of america, walmart, merck, home depot and jpmorgan chase are your top five. the worst performer, at&t. verizon is also lower. a lot of talk -- we're going to do more on this about that softbank deal for sprint. meantime, the nation's two largest public pension funds are

now taking aim at rupert murdoch. calling for the news corp. chief to split the role of chairman and ceo. a good idea or politically motivated to grab headlines? bring in political and business consultant at frontline strategies. mark, your reaction to what california pers and californiasters are saying? >> it is kind of like getting a couple of green bay packer season ticket holders to suddenly hold a press conference and say they're demanding that aaron rodgers be replaced as quarterback. you've got a couple of pension funds, albeit the biggest in the world, struggling as of late to return investments they promised to their members, and yet at the same time they're trying to tackle one of the most successful media organizations in history. >> this sounds like you are saying they don't have a huge amount of credibility when they talk about independent leadership. i would imagine porpoise as well. but at the same time how much power do they have when it comes to the vote tomorrow? >> it looks like they've only got .3% of the actual voting

shares. they may go in conjunction with a number of other proxy votes from some european organizations that are calling for pretty much the same thing, for rupert murdoch, his sons -- >> so all together how much power would they have? >> i don't think they're going to have much. the murdoch family still has 30% of the controlling interest of stock right now. they tried this same thing last year and pretty much unsuccessful. i think it is interesting when you asked about that sort of independent leadership that they're calling for at news corp., when you look at the board of directors for both calpers and calsters, they're either former or current members of public leaderships. >> calpers promises its members 7.7%. just going back to pot calling the kettle black, right? >> what's even more interesting is that last year somebody happened to suggest that you might want to moderate your expectations just a little bit and they called for a drop of a

guarantee of 7.5%. they turned that down so that the huberous involved in this is pretty significant. three out of the last five years they've actually lost money for their members. i think that they need to take care of their own business first and worry about news corp. later. >> what do you think is the outcome of the vote with the growing opposition? >> i pretty much expect that the leadership is going to stay the same. i know rupert murdoch said he would divest himself personally from running both the broadcast and print sides of the organization which i think is probably a strong move for hem. i think they know they are in a pretty good position of power right now. don't see much change at news corp. because of calpers and calstrs. as we talked about, the markets have had a slow and steady climb up. bob pisani has said many

times -- i think it is as he have been dent today as it's been in a long time -- this is the most hated stock market rally in history. >> it confound the most people. it is amazing how well this thing holds up. we're near the highs for the day and the important thing is everybody's been talking about a pullback. most people have been talking about a pullback so they can buy more shares, not so they can get out of the market. but if this is a pullback, it is one of the most shallow pullbacks i've seen in a long time. we're less than 2% from new 52-week highs. we never got more than 3% away from 52-week highs. jim bullard was out an hour and a half ago say gdp growth should be about 3.5% in 2013. we're averaging close to 2% right now. i think that might have helped the markets a little bit. sectors holding up today, it is basically pharma and banks stocks here. lilly had had some positive comments on some of the drug they've been working on, a gastric cancer drug. abbott sitting near a new high. all the drug stocks near highs. the bank stocks are doing well

on top of that citigroup also had good numbers. the only company, bank company, that hasn't been doing as well since earnings came out is wells fargo. >> all that being said, bob pisani, to what extent have we given up the rally that was sparked by the september 13th announcement of basically endless qe into perpetuity by the fed? >> we aren't going much further than that. i turned that upside down. i'd say we're at four and a half year highs just three weeks ago. the fact that we haven't had any kind of noticeable pullback, not even 5% so that people could buy lower, i think that says a lot for the market right now. if we can resolve some of these issues, fiscal cliff, for example, you can argue for a hire multiple on the stock market as well. >> bob pisani, thank you for weighing in. coming up, we're going to give you 7 million and 1 reasons why it doesn't suck to be brad pitt. one is angelina jolie, by the way. five years later microsoft still trying to beat itunes.

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happy monday, everybody. let's take a look at what we're watching in street talk. we've got citigroup up here because it is a really big week for bank earnings. we're kicking it off today with "c." >> you can see, the stock is up 4.3%. that was terrible. rising even though third quarter profit fell 88% because eps beat the street. profit fell because it took a charge, tied to a debt sale. also the sale of a stake in a joint venture brokerage house. still the bullish take-away is this, here is what you care about -- core revenues in the main business continue to get better. that stock up 37% year to date.

okay. time to sell toys. goldman says yes and they're downgrading toy and gamemaker hasbro to sell today. >> i want to put this one in here. i know you've got kids, i've got a daughter. i really believe apple is having an impact on toy sales as well. kids don't want board games anymore, twhhey want an ipad ap. they downgraded hasbro to a sell. goldman still sees almost $6 left of downside. here's what's interesting about it. they note that per capita spending on toys was something like $85 paern back in 1998. it is now $60 a person. even in an inflationary environment. right? we have had a little inflation every year. average spending on toys has gone down in the last 14 years. maybe that is the apple effect. >> it really feels like the writing is on the wall. a rough start to the week for amd.

it is moving a little higher now. >> the stock's not moving. i put it in there because a rough week for amd employees. they're going to announce work force cuts up to 30% this week. last week had a miss. continues to get very difficult for amd, its shareholders and worse, its employees. also a blue monday for consol energy. >> they had both planned and unplanned mine idlings, demand for coal and electricity generation. is down. stock is holding up better than most coal related names. >> less coal energy should be the name of the company. a vote of confidence however

at allian tech. >> despite the name is actually an ammunition maker. they think the market has not given alliant enough credit. microsoft also making waves today announcing a new streaming music service that's taking on apple, pandora and even spotify. but is it too little, too late in a very crowded space? let's bring in rich greenfield, co-head of research at btig. is it too little, too late? >> thanks for having me. i mean you can never say it is too little, too late. we're in a very early stage of

digital music. music labels are finally making it easier to license rights. think about how long it took spotify to get into the u.s. it took years of negotiating rights. microsoft was able to move very swiftly i think based on what the folks at spotify had established from a rate structure standpoint had kind of paved the way. what really i think everyone who's listening should focus on is that microsoft is putting a very critical brand in front of this service. this isn't zune anymore. they're using their xbox brand. this is for all of windows 8. it is going to be on ios devices, android devices. they are using the central very critical xbox brand. i think microsoft will not want to fall putting that brand in front of their music service. >> how specifically negative is this for pandora, rich? >> i think this is just one of a number of negatives. for us, the reason we have a sell rating on pandora and a 375 target price is that we think competition is just building by the day.

pandora does a very good job of their core streaming radio product. you're seeing a lot of big companies very well financed. look, de. zer just raised a ton of money. spotify is building out their service. >> apple as well might do iradio. >> when you think about apple wanting to control your car, they've already got you on the go. we know they want to get into the car with siri being introduced into the car. sirius says they're going to roll out a streaming radio later this year. you'll see lots of competition this isn't just the microsoft attack. we think you'll see a lot of very large tech companies spending a lot of money to get into this space. >> i use all these services. isn't the real estate how you can play it more important in a way than what you play? i need to have it on my smartphone to plug in to my home stereo or my computer. this is only going to be available on windows 8, right? >> initially. >> how you going to use it?

how you going to play it, right? no offense, mobile -- windows mobile phones just are not that prolific. >> 100% agree with you. but tens of millions of people have xbox 360s. that's a very widely penetrated product worldwide. but again this is not so much about microsoft whether or not they're ultimately successful. this is going to roll out to an android app and ios app some time next year. obviously that's not specified right now. the key is that you're going to see the likes of apple and we think amazon and others come in to this space and try to replicate and maybe even one-up what you've seen microsoft do this morning. don't read too much into this one specific announcement. i think you're going to see more and more digital music competition over the next 12 months. >> talking about the headlines, let's take a look at what's going on with zynga. i've got to get your thoughts on this. it is overhauling its mobile ads. if i'm not wrong, it is kind of relying on the absent-minded click. perhaps you could call it the fat finger click. it just kind of says to me if that's the situation, it's getting desperate.

>> we think a lot of mobile advertising is relying on fat fingers. we've talked about facebook, ads on facebook over the last year -- they didn't even exist on mobile, now they take up the whole screen. zynga, used to be very easy with a big fat continue button while playing words or scrabble with dprendz. now it is a very tiny "x" in the upper left hand corner. aim thing with pandora. huge ad across the whole screen, small "x" in the upper left hand corner. you're showing some pictures that are from our blog that illustrates this problem. when companies rely on mobile advertisement is almost as difficult for the consumer to deal with in order to generate revenues. >> feels -- i know what you're talking about. >> disingenuous. >> doesn't it? i understand they've got to supplement revenue streams. >> it is kind of like tricking you into it. >> the worse part is really on facebook. let's focus on facebook. the problem there is that when you accidentally click on

something -- say you accidentally click that you like walmart. bad part is obviously you get spammed with walmart content going forward. but the real dangerous part for all of your friends is that they end up being targeted by walmart because every time you like something, facebook then uses that data when somebody wants to run a sponsored story and they target all of your friends. so it's a lot worse than direct mail. when you sign up for direct mail, it is bad. now when you sign up for direct mail online all of your friends get spammed as well. >> one drunken mouse click ruins it for the rest of us! >> exactly. >> rich greenfield, thank you. sharon at the nymex, big drop for nat gas. >> big drop for nat gas but look at how oil prices have recovered from the lows of the session. we were below $90 a barrel for the wti contract. that's closing here right now above the $91 mark. almost flat on the session and brent crude has completely turned around. it is above $115 a barrel. traders say well look at what happened to equities. really oil prices kind of followed that momentum in the trading session and also some

who were thinking that perhaps iran will be more conciliatory with eu. that didn't pan out. it is warm weather that brought down the nat gas price. that's the biggest drag in the energy complex today. the japanese buck-up -- $20 billion and change for sprint. after years of laying low, are companies from the world's third largest economy about to go on a buying binge? we're also going to talk all things american. a real american hero, general chuck yeager, first man to break the sound barrier will join us to talk about american innovation whether or not we're falling behind and his record that he just basically remade yesterday at 89 years old. it is amazing and immortalized in the movie "the right stuff." he'll join us on "street signs" coming up. >> way to go, buddy!

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i'm bill griffeth. coming up on closing bell, commodity king jim rogers is predicting financial armageddon on the who are done. he'll tell us how he's investing ahead of that. former council of economic advisors chairman glen hubbard has been mentioned as a possible candidate to replace fed chairman bernanke if mitt romney wins election. well, we're going to find out if glen would end the fed's stimulus programs in the next hour. then maria's one on one with imf managing director christine lagarde who has plenty to say about our fiscal cliff here in the united states. we look forward to seeing you at the top of the hour from here at the new york stock exchange. see you then. >> we lynn deed see you then. it is not a journey. every journey ends but we go on.

>> chanel unveiling its new ad for chanel no. 5. he is the first pitchman for chanel's famous scent. he reportedly got $7 million for the gig. i don't think it's really sexy enough. >> they offered me $4 million. i was like, are you kidding? chanel, come on. they didn't offer me anything. >> they really didn't. speaking of deals, this was the deal that shook -- an they really wouldn't -- this was the deal that shook the world. on october 31st, 1989, japan's mitsubishi famously bought control of new york's rockefeller center for $846 million. and now nearly 23 years later japanese telecom firm softbank is taking control of kansas city based sprint as a new japanese buying spree on the horizon? co-head of the global m and a practice at sullivan and cromwell joins us. he's one of the world's top deal

lawyers. frank, you sent me an e-mail yesterday that i thought was very poignant. you said that the japanese can't grow at home. they're going to look abroad. should we expect more big japanese purchases of u.s. companies? >> brian, i think we're going to see a lot more of this. to some extent the question is why we hadn't seen deals like this already. if you look at the demographics in japan, it's an aging society. their market, by and large, their home market is contracting. it is certainly not growing. they have big multi-nationals that have lots of cash, the ability to borrow more, a favorable exchange ratio. so deals like this are inevitably going to happen as the japanese corporates try to figure out where to go to next. because the society may be contracting but these companies certainly don't want to be contracting. >> so they need to do this and they have the means to do it. where exactly -- when you say

where they going to go to next, what sectors do you think are right for japanese buying? >> mandy, of course it is going to vary based upon company but i think what you're going to see is the sectors affected will be those sectors that have big japanese multi-nationals. so i think if you're going to see deals in entertainment, you're going to see deals in equipment, you're going to see deals in health care, i think you're going to see more consumer goods deals, pretty much across the board. do i think toyota is going to buy general motors? i think that's unlikely. but when you look down the list of the big multi-nationals in japan, those are the companies that are going to want to do the acquisitions. and then you look both here and europe, you probably come up with a pretty good list of potential candidates. >> okay. i know that one of your other points is that because japan is a strong ally of the u.s., there is no national security concerns either. but frank, we have to leave it there.

thank you for joining us. we've got the original daredevil, chuck yeager here to talk about that amazing space jump, his new record at 89 years of age and whether he thinks america still has "the right stuff." ♪ into a fifth anniversary of remission? whatever your business challenge, dell has the technology and services to help you solve it. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees.

so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade.

what may be more amazing that felix baumgartner's record breaking 24-mile high sky dive is the fact that he broke a record that was 52 years old. in basically like you say, that was done 14, 15 years ago by previous individual. so, basically he didn't -- didn't uncover anything. most research you see, it occurs

y step onto another, you know, record or something like that. that's exactly what the guy did that jumped off the platform. he did what a guy did, you know, 14 years ago. >> because we're not doing what you and your colleagues did 40 years ago, the speed records we set were in the '60s and the early '70s with the sr-71, the height records in an airplane and the first flight of a 747 was in 1969. general, are you worried about the pace of development or the lack of? >> no. but there's -- basically what's happening, those records, like the speed of sound, when did the wright brothers fly? 1903. when were we able to get above the speed of sound? 1947. it took us that long, actually,

to find out how to design an airplane that would -- that you could control through the speed of sound. and so it's not any lag in research, you know, that makes a good subject. but there's a lot of research going on today, especially in the military, that we don't share that data with other countries and the like. if you go back to the x-1, we got above the sound of speed in 1947, the way we got that airplane above the speed of sound was having a flying tail on it. we had never done that before. when we found out that we needed a flying tail to control the airplane through mach 1, it took the british and french and soviet union five years to figure out that little trick. so, we've always had a big lead on the rest of the world in research, not only aeronaut aeronautically information, but

in space and the like. >> general, with all due respect, why does it take seven hours to fly from new york to london or six hours from new york to los angeles in this day and age? the concorde came and went. why aren't we making supersonic commercial aircraft? >> i tell you, if you look at what it takes in fuel and engines to operate an airplane above the speed of sound, you'd back off on your comments, because basically we can design an airline today that will carry people at five times the speed of sound, but it will cost -- you know, there's not enough money in the world to pay for the ticket on that flight because of the amount of fuel that's used to accelerate that airplane out to the speed that you're talking about. so, basically, cost enters its ugly head. and that's -- it's just not worth the cost to do something like that. >> fair enough. i want to leave with you this, general. i want to ask you about your

trip yesterday. 65 years later. breaking mach 1 again. what was it like yesterday? >> well, basically what you don't realize, after i flew the x-1 i was flying airplanes at two, three times the speed of sound every week until yesterday. >> i know that. how about this, who's a better pilot, you or scott cross fooeltcrossfield? >> i don't know who you're talking about. >> there's your answer. >> you got any other comments about him? >> no. he's still got the fire in him. i've flown into your namesake airport. >> crossfield? >> no, yeager field. thank you for joining us. i really appreciate it. >> thank you. >> still got the fire and brimstone. who's that? coming up, we'll kick off our week-long look at truly alternative investing with a

trip to the track. not to bet on the ponies but to find out how you can invest in thoroughbreds.

we are off to the races to kick off our alternative investing series. today we're talking blood stock, the breeding and trading of thoroughbred race horses. we have terry finley, president of west bred thoroughbreds, what do you do and how do i get in on it? >> we put together partnerships. we're all over the world. we're focused in the u.s. and what people do, they buy an equity stake in the horses we buy, usually at auction. the way people can get in, they can come to our website, contact us, we'll see if we're a good fit for them f they're a good fit for us and we'll take the next step. >> it's not just, for example, taking a stake in one horse, which is a huge gampl. maybe a 20% stake in five horses to essentially even out some of the risks here. >> yeah, that's a great way to put it. our thought and our premise is,

it's a lot better to own a 20% of five horses than it is 100% of a single horse. >> how much do i need? what's my minimum investment and how much can i expect to make on that in one year? >> well, the roi is tough. have you to get very lucky. they have to do very well at the top end of the market. but to get in, i always like to say, you know, if you look at a vacation to europe or a sports car, if you put those to the side and you look to get into the race horse business, you're in the same league. >> you say -- you're not really selling one when you say have you to be very lucky here. >> well, do you. >> is it risky? can you lose all of your money? >> all the time -- well, not all the time but it happens auto a regular basis. when you have those five or six horses in your portfolio, you're hoping for the one horse to hit the big time and to run in the kentucky derby ort breeder's cup or the other big races around the country. >> well, thank you so much for explaining it to us. thanks for coming on today.